Middle East economy threatened by possible U.S. attack on Iraq: WB

Middle East economy threatened by possible U.S. attack on Iraq: WB

A U.S. attack on Iraq would harm chances for economic development in the Middle East, notably because it would discourage investment in the region, a senior World Bank official warned.

"Violence threatens (economic) stability in a way we have not seen in a generation," Joseph Saba, a Bank official responsible for Lebanon, told a press conference in Paris.

Saba also cited Israeli-Palestinian tensions as clouding the regional economy.

Asked specifically about war in Iraq, Saba said "it will have a negative impact."

He said: "Political external factors have, of course, an impact. Investors want stability and certainties."

He warned that the conflict would send floods of Kurdish refugees from Iraq into Iran, threatening Iranian economic stability.

"They will search for jobs, require social services and be a drain on the (Iranian) economy at a time when the economy is already under heavy stress," he said, citing demands for employment from growing numbers of young and educated Iranians.

Saba also said the lingering Israeli-Palestinian conflict had prevented Jordan from reaping the full trade benefits of the 1993 Oslo peace accpords.

Jordan, he said, "has been hurt in the sense that expectations have not been met." --AFP